Why a Trust

Why Use A Trust?

To keep affairs private.

Trusts avoid probate, guardianships and conservatorships.

Probates are public record.

Avoid or minimize estate taxes.

  • In case of illness, incapacity or death, all financial and business matters will be taken care of by your successor trustee according to the instructions that you have put into the trust’s language. There is no need for a court appointed Conservator.


  • People create charitable trusts to transfer highly appreciated assets into a trust where there is no capital gain taxed to them when it is sold, and they can receive the income from the trust for their lives. At the end of their lives, the trust goes to their designated charity named in the trust.


  • Create a trust to hold and manage funds for a disabled family member. For example a grandchild may have disability and you want to provide for them for their lifetime. The trust can be written so that the trustee takes care of their needs. If they are on SSI, a special needs trust can be created so that it does not disqualify them from those benefits.


  • Create a trust for a spendthrift child to take affect at your death. Maybe one of your children doesn’t manage their finances very well. Will they mismanage their inheritance? Will it be gone in a year or less? Or perhaps that adult child has a boyfriend or husband you don’t trust and they might spend all the money. You can leave your child’s inheritance in trust for them for their lifetime or until they reach a certain age. The trustee has discretion to pay out sums of principal for their basic needs such as health, support and maintenance.


  • Education Trusts. You can leave funds for your grandchildren’s education. The trust spells out the criteria for them to receive funds to pay for college education and states when the balance of the trust will be paid to them.


  • Trusts are sometimes created to hold your children’s inheritance until a time you state it will be paid out to them. The trust can pay them income monthly, and distribute a certain percentage every few years or pay out all at once when they reach a certain age. You determine the terms stated in your trust.


Article Provided by:
Libby Crom, Fiduciary & Asset Management, LLC
(503) 409-0542

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